Time for a little good cheer this Monday afternoon...
Just to give you an idea of how much debt has been created, the average G-20 budget deficits are 10.2% of GDP, when 3% is normal. Greece, which is on the edge of bankruptcy, will be 12.5% in 2010. Yet, the US is already at 13.5%. Close behind are the UK and Japan at 11.6% and 10.3%. The erosion of confidence and trust will soon manifest itself as lenders stop lending to these nations. This has already happened to the US with the Fed monetizing more than half of Treasury issuance. This is proof the dollar will crash and be devalued, as debt goes into default. Foreign nations are understandably concerned, as the dollar now only makes up 37% of new foreign reserve holdings. That is about a 50% reduction in holdings. As we reported before it is no wonder oil producers have held secret meetings to dump the petro dollar. Wall Street, Washington and central banks worldwide refuse to heed the lessons of the centuries and so have been damned to oblivion.
And:
h/t Larry W.
Good and original information. Thank you!
And just think, the USA is on the precipice (Obama's own word!) of "reforming" its health care system, which will slowly destroy that entire sector of its economy and turn it into a full-blown socialist system.
The USA isn't going to be able to put its finances back in order under this administration. God help us all.
If aynbody hasn't seen this yet
http://www.usdebtclock.org/index.html
PMSH has kept out deficit to GDP ratio at about 5% . . .
I have to say it...."Hide the Decline"
Sorry...
just start buying gold and gold coins gold stocks ..same with silver ..we are headed back to pre dollar times folks soon it will be the bartering system if the chinease, muslims ,and russia don't join chavez and the likes to take over the u.s. and canada but eh maybe that is what we need a good old communist inspired world war with nothing but pure blood shed and catastrphic nulear melt down wear complete countries are leveels to ashes by the u.s. ...who knows folks strage times so much unease ,fiscally,politically around the world something has got to give and in the next five years we will see just what breaks ...i said the same thing over and over now hopefullyi am wrong and am just a paranoid fear monger shame on me !! i am stockpiling my guns and ammo and my survivalist books as we speak ..i just don't trust it anymore !! and we in canada are to small and unarmed to defend or do anything about it !! how pathetic we are sitting ducks if the u.s. turns on us we are sceweded becasue any other country that saves us ..say russia,or china or one of the others we will of course be enslaved by them to pay them back !! so yeah canada actually sit's in a very bad spot right now and given our natural resourses and our good finacial responcibilitiy we will be raped and pillaged by all !! again if it happens !!
sorry for the negativity
Paul in calgary
I think they are soon to run out of people to buy the debt. The US is straining the Chinese ability to lend. In that vein.
http://supertremendous.com/Galleries/Funny/The-20-Funniest-Barack-Obama-Photoshop-Photos/Obama-Urkel-1149.html#joomimg
If there's to be a full-blown fiscal storm, I don't want Canada foundering on the rocks. Even if Canada is more sea-worthy than other nations, the international bond traders might not be too discerning when the barometer starts to plunge.
Canada must assume an extremely conservative fiscal policy now, so that all monies to run the government can be raised from within Canada if need be. That way our government can turtle, fiscally speaking, should Hurricane Obama make landfall.
we better build pipelines to the east & west coasts.
if hugo stuffs us the east will freeze.
the chinese will buy DIRRTYY sand oil
Again, I have to ask;
And we need more big government because...?
The US economy has been run by white collar criminals ever since the mint and treasury surrendered their constitutional duty over the issuance and control of currency and credit to a foreign banking syndicate called the Federal reserve (1913).
The Fed and their investment banking cronies on Wall Street have a long partnership inflating currency, credit and markets, reaping the windfall from insider trading before collapsing market/investment/commodity bubbles before market players catch on.
They have even done this with the greenback for the past 90 years and now that pregnant cat has come home and Barry has let it in the house to have its kittens who will be fed by taxpayers. The greater the inflationary debt, the more productivity and wealth must be confiscated from private citizens to pay for it.
Time to kill the creature from Jekyll Island if the republic is to remain free and not a debt slave to insider banking criminals.
The US could have a new national hard currency tomorrow that would be the envy of the G20 - but first they have to run the crooks out of the Fed and take the currency system back.
Why does the RGDP curve stop in 2001? Surely there must be data on productivity newer than 8 years old?
I agree it looks bad, but we don't want to be accused of doing the same sort of trickery with plots that the warm-mongers have been doing.
I followed the link to Chapman's piece and could not get past the opening paragraph claptrap about transnational conglomerates having stolen America’s destiny and China’s slave labor.
Then I followed the link to the Captain's site and could not get past Natasha.
I can't help but notice that the graph showing government expenditures as a percent of GDP shows a definite hockey stick trend. Hopefully, the data was peer reviewed!
just start buying gold and gold coins gold stocks ..same with silver ..we are headed back to pre dollar times folks
You can't eat gold and you can't shelter under it.
Gold is as much a fiat currency as paper dollars.
Gold as currency implies the continued existence of a functioning market.
The difference between gold as a medium of exchange and folding cash is entirely in people's minds.
I've been buying cases of good booze, cigarettes, chocolate, Yoders canned bacon, other canned goods, etc. since the beggining of the crash.
Hoarding and bartering is the future if hyperinflation sets in.
Gold, I guess you could always use it for fillings in your teeth or a paperweight, doorstop etc.
Money Mischief , by Milton Friedman
Having no currency peg invites money mischief.
Printing money causes inflation.
Printing lotsa money causes lotsa inflation.
Reducing the money supply causes deflation. (1930s, cash was king)
Debtors are, in effect, bailed-out during inflationary times.
Govts today are generally in lotsa hock. They also control the printing presses. Guess what is coming.
Adam Smith expressed this philosophy several hundred years ago. He basically said the the British government would never pay for their wars because they would inflate their way out of debt. It has been going on since Roman times. I fear we are witnessing the death throes of the American Empire.
Oz you need to include ammunition....
I'm considering converting cash to bullion as well. What concerns me is whether there will be anyone willing or able to buy it back. Gold is pretty, but silver has more practical applications. That is where I'm leaning.
But Oz is right. You do not want to be holding cash if hyperinflation sets in. I'm expecting our interest rates to sit where they are for the next six months, so I'm still holding stocks. Mostly in non-discretionary industries. I'm not so much of a doomsdayer, but yeah, I have a small stockpile of lead.
eastern paul,
I left out a lot of things like toothpaste, sacks of grain(I have a mill), soap, deodorant, lots of socks, underwear, spare cartridges for my RO water system, first aid supplies,... that's what the etc. meant.
The list above at December 21, 2009 7:43 PM was chosen because we(my wife and I have been survivalists since we were married in the early '80s) got those things, luxuries, for bartering, but other various stuffs are more necessities that are just "end-of-the world-as-we-know-it" supplies.
I wouldn't trade any of it for gold or silver, and especially not for "gold stocks or certificates" which are just paper and not even gold or money.
A person would have to be a real dupe to own gold stocks or certificates as a hedge against the currency based market system collapsing.
Just how they think they could redeem them for the actual metal in such a situation boggles the mind.
A reduction in lending is not inflationary. It is deflationary. Inflation would be bad, but deflation will be catastrophic.
Oz, I see you trot out that hoary old nostrum "You can't eat gold". You ever try chow down on a wad of sawbucks? Not much nourishment there either.
Oz
I reread rour post and see where you are comming from. TEOTWAWKI. Barter economy you say.
Perhaps, but in the past, even in a total economic breakdown, the value of gold has held, and as a consequence, has often meant the difference between surviving or not.
FWIW, I don't see
FWIW, I don't see much future in barter. Too inefficient by orders of magnitude. It is why we still cling to trade in currency when it takes wheelbarrows of it to eat.
The reason the data ends in 2001 is because it is a rolling 20 year average and thus it takes 10 years of data in the front and the back to calculate. I just moved it to the center to appropriately reflect the central year that this average was calculated on.
FWIW, I don't see much future in barter. Too inefficient by orders of magnitude. It is why we still cling to trade in currency when it takes wheelbarrows of it to eat.
~Woodporter
I'm in general agreement, Woodporter.
Look at the Great Depression, though.
They had a huge stock market crash in the late summer of 1929, the slide lasted into 1930, then there was a short recovery(dead cat bounce) until well into 1930, later in 1930 the whole market slides off the cliff!
The market didn't really recover for 35 YEARS which was 1954.
That happened when the hottest temperatures in the 20th century were when, in the late 1930s after the crash.
What we are seeing right now is the same thing, market wise, as happened at the beginning at the '30s.
But let's add in some twists.
Imagine the nations of the West prior to "the Great Depression" had brought in huge numbers of immigrants who were from nations that didn't share their religious background, didn't have their educational level, and had grievances against the people of those Western countries.
Add in the twist that the immigrants live in ethnic enclaves, refuse in large numbers to learn the langage or accept the culture of the host Western nations, and regularly agitate for one-way accomodation toward their own foreign culture and issues associated with the old country.
Let's add as well the wrinkle that those Western nations entered "the Great Depression" with a burgeoning welfare state, individual national debts that were already ready nigh unmanageable, and a huge section of their core populations having an overweening sense of entitlement to everything without working or meriting anything.
Let's put in the last coffin nail shall we?
Imagine that instead of the 1930s being a very warm decade, that 1930 was the start of a new "Little Ice Age" and that severely reduced food production, due to shortened growing seasons, was going to hit a world where the population had grown to 6+ Billion people.
I'll tell you, Woodporter, under those conditions you couldn't get me to part with a single canned ham for a semi-trailer full of gold, especially if there had been a previous "Great Depression" and a historic track record that showed the recovery was 35 years, half a life time, away.
Oz
All that you mention for survival essentials is all well and good but may I suggest that you are overlooking something that is small in cubic space needed for storage, can be easily bartered for goods and services great or small, is currently very cheap to stockpile but is absolutely reliant on a stable international trading system, has a very long term ( measured in years) shelf life, is craved by everyone and judged by many to be an absolute fundamental to any pretense to enjoying life yet not given even a passing thought. In todays' world it is ubiquitous and taken totally for granted but whose lack would be of the very highest order of nostalgic regret and whose provision decades on in a real world catastrophe would make you a person of wealth and influence. It has no real substitute , is not naturally available regionally and historically has been more valuable ounce for ounce than gold.
I speak of pepper, or to be more specific pepper corns.
Cheers
Thank you tdtp, I did overlook peppercorns.
I will remedy the situation ASAP, table salt too.
Oz
Make sure that the salt is iodized* ;), personally I am an optimist and do not think that even a full scale nuclear war ( biological is another kettle of fish) would disrupt mankind for very long: a handful of generations; in the sense of redeveloping trade routes and other cultural sinews. So my own survival kit consists largely of a very well stocked pantry and then small, highly portable, long-lived potentially valuable luxuries ( here I am talking pepper/spices, playing card decks, dyes ( for bribes for the women) , shelf stable vitamins/ minerals, the most popular calibers of ammo etc) that can be used for the barter or baksheesh necessary to get over the original hump and then things like practical books on technology ( i.e. How Things Work), Medicine ( Practical Midwifery), applied Chemistry etc. and at last a tightly lidded pot and a few feet of copper tubing. Ha!
* there are huge salt deposits scattered all over North America and gaining access to salt has been traditionally one of the main motivators for trade so presuming survival, relatively local salt will become available; however, up until the early 1900's folk who lived in the interior areas of NA suffered enormously from Goiter and other thymus conditions. The addition of Iodine ( extracted from burnt Kelp) to the local salts helped solve this. Pepper comes from across the seas and while I do not envision any really major disruptions I can easily see how turmoil in the International money/trade markets or foreign domestic politics could drive its price up to be even dearer than, say, saffron.